Protection Of Sports Bettors A Primary Concern For Colorado Division Of Gaming In Thorny Bet Acceptance/Rejection Process


On Thanksgiving weekend 2020, a weekend typically jam-packed with wall-to-wall sporting events, an exhibition bout between Mike Tyson and Roy Jones Jr. took center stage due to fewer events amid pandemic restrictions.

Tyson, a former undisputed heavyweight champion in boxing, opened as a decisive -235 favorite at DraftKings, which offered sports betting odds on the event in a handful of states. But in Colorado, gaming regulators had serious reservations on if the wagers ensured a fair betting environment for customers.

As the Colorado Division of Gaming mulled the suitability of the wagers, Director Dan Hartman placed a call to the fight promoters. While the promoters felt they could train the judges well enough to score the fight correctly, Hartman did not. Hartman peppered the promoters with queries on the judging, fight gear, and the weight of the gloves, among other concerns.

“On the surface, it looked like a good, sanctioned bout, but when you really got into it, the scorekeepers were basically celebrities,” Hartman told CoBets. “They didn’t have experience in scoring bouts like this. It didn’t pass the smell test.”

Hartman rejected it.

Tyson dominated the fight in the estimations of numerous boxing experts, while landing power punches at a considerably higher rate than Jones, according to CompuBox punching stats. But Tyson’s supremacy did not translate to the scorecards, where the judges ruled the bout a draw. An 80-76 decision by former boxer Vinny Pazienza in favor of Jones was deemed as “pure insanity” by boxing analyst Dan Rafael.

In retrospect, the decision by Colorado regulators to reject wagers on the exhibition can be characterized as apt. Over the last 12 months, the division has rejected nearly 70 proposed bets from various sportsbook operators for approval in the state’s sports betting catalog. The rejected Tyson bets serve as a microcosm for the thorny process the division must complete when reviewing risky bet offerings.

Raising red flags

There are a litany of factors for why the division might reject a bet, running the gamut from wagers on a negative outcome to integrity issues, as well as committee decisions and past posting. On their face, negative outcome propositions are the simplest to ascertain. Under the category, the division rejected proposed bets on if a player would take a knee during the national anthem and another on whether a player would be ejected during a game.

Simply put, negative outcome bets are open to manipulation. Rather than occurring during the natural flow of a game, a player can control the outcome of an ejection prop, as an incident involving Udonis Haslem of the NBA’s Miami Heat illustrates. When Haslem made his season debut in May, the veteran forward stayed in the game for a mere three minutes before officials tossed him for fighting with 76ers center Dwight Howard.

Theoretically, nothing would prevent Haslem from informing several handlers that he plans to engage in a fracas that will result in his ejection from a game. Haslem is prohibited by NBA rules from wagering on league games or facilitating a wager through contact with bettors. By rejecting the bet, the division eliminates the possibility that a Colorado book may be victimized by such a scheme. Several other states, most notably Michigan, also do not allow negative outcome propositions.

In Colorado, meanwhile, the director of the gaming division has statutory authority to reject certain proposed sports wagers based on the following qualifications laid out in Rule 5 of the division’s Sports Betting Regulations.

(4) The Director or Director’s designee will consider the following factors prior to  authorizing a sports event, league or portion of a sport or athletic event;
(a) Any relevant input from the sports governing body or conductor of the sports event;
(b) Whether the outcome is determined solely by chance;
(c) Whether the outcome can be verified;
(d) Whether the event generating the outcome is conducted in a manner that ensures
sufficient integrity controls exist so the outcome can be trusted;
(e) That the outcome is not affected by any bet placed; and
(f) Whether the event is conducted in conformity with all applicable laws

Colorado Division of Gaming, Sports Betting Regulations, Rule 5.4

Wagers that involve “past posting” also tend to draw a discerning eye from the division. Take, for instance, bets on next month’s NHL Expansion Draft. In May, the division rejected a request from a sportsbook that would have allowed bettors to wager on the players selected by the Seattle Kraken, an expansion team that will begin play in the fall.

As with the 2017 Expansion Draft featuring the Vegas Golden Knights, NHL clubs might find it challenging to manage the flow of information regarding exposed players who are placed on the team’s unprotected list for selection. At the same time, Hartman believes many teams will pay a courtesy to those players by informing them of the decision before the lists are made public. As a result, the House could gain an advantage by setting odds on props based on the leaked information.

“Those players know they will be on a list — it doesn’t take much to put out a negative tweet or to tell your brother,” Hartman said.

Ultimately, the division is looking to protect bettors even if a decision to reject a certain wager is an arduous one.

TypesNumber Of RejectionsNotable Bets
Chance35Coin toss, Color of Gatorade poured on winning coach
Integrity Issues30Academy Awards, Table Tennis scheme, Puppy Bowl
Committee Decision22Jack Adams Award - Hockey
Negative Wager6First NFL coach fired, Number of caution flags, Will a player take a knee?
Past Post4Jai-Alai, First Pick of NBA All-Star Draft, NHL Expansion Draft
Doesn't Meet Rule2College Player Props, Heisman Trophy winner
Risk1MLB Spring Training

Hot dog eating vs. Academy Awards

When Joey Chestnut attempts to break his own record in Sunday’s Nathan’s Famous Fourth of July International Hot Dog Eating Contest, Coloradans will have the ability to wager on the gastronomic feat. Last July, Colorado joined New Jersey and New Hampshire as the only states that allowed wagering on the event. Chestnut consumed a record 75 hot dogs last year in 10 minutes.

On Thursday, Major League Eating announced that DraftKings will serve as an official sponsor for the contest for the second consecutive year. In 2020, the contest ranked second in handle among all novelty bet events at DraftKings, according to the company. DraftKings is offering a free-to-play $25K pool on the contest, along with live-betting opportunities in Colorado.

While Hartman emphasized that the contest is “a little gross” when you watch it, the event still checked all the boxes under consideration in sanctioning an event. The contest has a governing body, a broad set of rules, and officials monitoring the participants, he noted. The same cannot be said for props on the Academy Awards, which does not have a “nexus to sports.” In April, the division rejected nearly two dozen bets related to the motion-picture awards.

In many respects, the decision-making process for accepting or rejecting a bet is a collaborative effort among a number of employees throughout the division. When a bet is proposed, the division’s investigative staff will conduct its due diligence to determine if the wager conforms with the framework of the state’s sports betting regulations. Quite often, one staff member will have expertise with wagers in hockey, while another has more proficiency with baseball, Hartman explained. This holds true for almost any event, even niche ones.

The exchange of ideas allows the staff to reach a consensus on if certain bets such as ones on the hot dog eating contest or others on the NFL Draft pass muster. With sports betting still in its infancy, the division faces a tall task in imposing the proper guardrails for bettors when integrity issues arise among some proposed bets.

“You really have to dig deep to make sure what they are putting out there really fits all those categories,” Hartman said. “It’s really a team effort to get where we need.”

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running.

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